Today, 3 June 2014, is the deadline for all the financial institutions in non-IGA jurisdictions or Model II IGA countries to register with the IRS in order to be included in the FFI list that will be published on 1 July 2014. The IRS will publish a list of registered and approved FFIs and their GIINs every month. An FFI list search and download tool will also be available to search this list by FI name, GIIN or country.
Registration by Model 1 IGA Countries
FFIs located in a jurisdiction with a Model 1 IGA need to register and obtain a GIIN prior to 22 December 2014 to ensure inclusion in the IRS’ FFI list to be published on 1 January 2015.
The FATCA registration process consists of:
i. creating an account;
ii. completing the registration form (same format as Form 8957);
iii. submission; and
It is surprisingly straightforward and registrations can be completed quickly.
As a part of the registration process, FFIs are required have a ‘Responsible Officer’ to approve and submit the registration. This obligation does not apply in Model 1 IGA jurisdictions though, where one or more points of contact simply need to be named.
A Sponsoring Entity that agrees to perform the due diligence, withholding, and reporting obligations of one or more Sponsored Entities should simply elect to be treated as a Sponsoring Entity as part of its registration. The current registration system does not allow Sponsored FFIs to register separately. Instead, a transitional rule permits a Sponsored Entity to quote the GIIN of its Sponsoring Entity. A Sponsored Entity will not need to obtain its own GIIN until 1 January 2016 giving the IRS plenty of time to develop a streamlined registration process for Sponsoring and Sponsored Entities.
In Notice 2014-33, the IRS announced that, to facilitate an orderly transition for compliance with FATCA, calendar years 2014 and 2015 will be regarded as a “transition period” for purposes of IRS enforcement and administration of the law's due diligence, reporting, and withholding provisions. However, this transition period should be regarded as facilitating the smooth implementation of FATCA by FFIs and not as a delay to its effective dates. It is therefore still intended that FATCA will go live on 1 July this year, but, with regard to its reporting, due diligence, and withholding provisions, and so as to "facilitate an orderly transition," the IRS will refrain from rigorously enforcing many of its requirements until 2016 so long as FFIs demonstrate good faith in implementing the new law.
Upcoming deadlines to watch out
FFIs are required to upgrade the new account opening procedures by the later of 1 July 2014 or the effective date of the relevant Participating FFI Agreement.
We are noticing variations in how different jurisdictions are interpreting Model 1 IGA’s. In Luxembourg, for example, it appears that wholly owned holding companies are not viewed as investment entities where they do not hold themselves out as such. This pragmatic approach could significantly reduce the number of entities that would otherwise need to register.
previous comment / Udi Vithanage
If you would like to discuss outsourcing to the Aztec Group or are considering migrating a fund or SPV, please call James Duffield, Head of Business Development, on +44 20 3818 0250.
Aztec Group Guernsey
Aztec Financial Services (Guernsey) Limited
PO Box 656, East Wing, Trafalgar Court
Les Banques, St Peter Port, Guernsey, GY1 3PP
Telephone: +44 1481 749700
Facsimile: +44 1481 749749
Aztec Group Jersey
Aztec Financial Services (Jersey) Limited
Aztec Group House, PO Box 730
11-15 Seaton Place, St Helier, Jersey, JE4 0QH
Telephone: +44 1534 833000
Facsimile: +44 1534 833033
Aztec Group UK - London
Aztec Financial Services (UK) Limited
2 Throgmorton Avenue
Telephone: +44 20 3818 0250
Aztec Group Luxembourg
Aztec Financial Services (Luxembourg) S.A.
8, rue Lou Hemmer, L-1748, Luxembourg – Findel
Grand-Duché de Luxembourg
Telephone:+352 246 160 6000
Facsimile: +352 246 160 6016
Aztec Group The Netherlands
Aztec Financial Services (Netherlands) BV
Spaces Zuidas, Barbara Strozzilaan 201
1083 HN Amsterdam, The Netherlands
Telephone: +31 20 794 4820
Facsimile: +31 20 794 4821
Aztec Group UK - Southampton
Aztec Financial Services (UK) Limited
Forum 3, Solent Business Park
Parkway South, Whiteley, Fareham, PO15 7FH
Telephone: +44 238 202 2300
Facsimile: +44 238 202 2309